Published: Wednesday, May 8, 2013 at 10:02 a.m.

Last Modified: Wednesday, May 8, 2013 at 10:02 a.m.

A grand jury has declined to indict Sheriff Chris Blair for violating state campaign finance laws. But the panel did issue a scorching rebuke to the sheriff for flouting the spirit of those laws by not identifying the source of almost $30,000 in campaign contributions.

The grand jury found that Blair funded his campaign with at least $18,000 in questionable contributions from a local physician, Dr. Vincent Palmire, who is related to Blair by marriage.

The county's top law enforcement officer did so by using a company he had set up just before entering the sheriff's race.

Blair took the money from the firm, converted the cash to his own personal funds, and then immediately put it into his campaign war chest, according to the panel's five-page report, which was released Wednesday.

Palmire, according to the report, put $28,362 through several different firms he had established into the bank account of Chrissan Investments LLC.

State records indicate Blair set up Chrissan Investments about three weeks before he announced his candidacy for sheriff.

Blair escaped prosecution only because of a technicality in state banking laws pertaining to when he actually took possession of the money from the company he had created.

Blair did not comment on the report, but through his lawyer, denied any wrongdoing.

Attempts to reach Palmire for comment were not successful.

The grand jury said in its report that it was "impossible" to determine whether a crime had been committed.

That was because of the "conflicting and inconsistent" testimony offered by some of the witnesses, the report states. Grand jurors did not elaborate on who offered the conflicting testimony or what it was.

The 18-member panel, though, was direct and unambiguous in its criticism of the sheriff's actions.

"Based on the totality of the circumstances," the report states, "the grand jury finds that Mr. Blair, intentionally or not, effectively hid a principal source of his campaign funding for his campaign for sheriff: Dr. Vincent Palmire. This action is contrary to the spirit and the intent of Florida's campaign finance laws."

The grand jury members said they "cannot condone the actions of now-Sheriff Blair regarding his campaign finance activity."

They also reminded the sheriff that merely "complying with the strict letter of the law is not sufficient for the elected officials of Marion County."

The sheriff's lawyer, Milan "Bo" Samargya, proclaimed in a statement issued Wednesday that Blair had fully cooperated with this investigation and had been cleared of any criminal wrongdoing by the grand jury.

"The grand jury found that Sheriff Blair did not receive any illegal campaign contributions, the loan to Sheriff Blair was permissible, and Sheriff Blair did not violate the Florida campaign finance laws," the statement said.

The grand jury will send its report to the Florida Ethics Commission for further review. The panel also questioned whether Blair, Palmire and Chrissan Investments had complied with federal tax laws — something the panel indicated was outside the scope of its inquiry.

Blair's saga began on Feb. 18, 2011, when, county election records show, he deposited $1,000 of his own money into his campaign account for the Republican primary against former Undersheriff Dan Kuhn.

The 18-month contest turned out to be one the most expensive local races in recent Marion County history. Each candidate amassed and spent more than $200,000.

Blair entered the race three weeks after submitting paperwork to the state to launch Chrissan Investments.

Blair told grand jurors that the company was unrelated to his political campaign, but the report does not specify what its purpose was.

State records show the company's officers include Blair and his wife and daughter. The address for the company is Blair's home address.

According to Tax Collector George Albright's office, neither that agency nor the county Property Appraiser's Office has any record for Chrissan Investments.

Blair told the grand jury that in May 2011 he had inked a promissory note for up to $50,000 with Dr. Palmire, a board-certified anesthesiologist who practices with the Ocala Heart Vascular Institute. Blair's wife, Sangi, is the sister of Debra Palmire, the doctor's spouse.

The report states that no formal records exist to prove the loan was made and that Palmire did not receive a copy of the note — although Blair claimed he offered the doctor one.

The loan was also unsecured, meaning Blair did not put up any collateral.

In June 2011, Blair accepted a $10,000 check from Dr. Palmire. That money was deposited into Blair's personal account, the report says.

Blair, county election records show, had pumped $11,500 of his own money into his campaign from the time he entered the race until June 30, 2011.

That amount included an $8,500 contribution that Blair made from his own pocket on June 30, 2011.

It's unclear from the grand jury report whether that was part of the money that Palmire provided to Blair.

On March 29, 2012, some 13 months after he formed Chrissan Investments, Blair opened a bank account for the company, according to the report.

Chrissan Investments' account was established with $9,000 in checks drawn from seven different companies — all of which were owned or controlled by Palmire.

One day later, on March 30, 2012, Blair deposited $9,000 into his campaign fund, claiming in election documents that it was his own money.

In March, May and again in August, Chrissan Investments received 15 checks amounting to $28,362 from the same seven companies owned by Palmire, the report says.

The grand jurors learned that on two separate occasions in July 2012 Blair endorsed checks totaling $18,000 made out to himself from Chrissan Investments.

He then "simultaneously" put that money into his political campaign account, meaning he moved the money during the same transaction.

County election reports show Blair dropped $9,000 of his own money into his campaign on July 5, 2012, and another $9,000 on July 20.

Under federal law, business transactions of $10,000 or more — whether as a lump sum or in a series of related payments — trigger a requirement to report the deal to the IRS.

Additionally, in August 2012 Blair reported four more contributions from his personal account. Those came to $6,630, election documents show.

It was unclear if those, too, involved the money he obtained from Palmire.

County election documents reveal that Blair did receive one contribution from Chrissan Investments. The $440 donation was made on June 19, 2012.

The donor is identified as an investment business.

The July and August moves occurred about the time Blair and Kuhn were making the last push before the Aug. 14 GOP primary — which Kuhn won with 53 percent of the vote.

Under Florida law, candidates are allowed to spend as much of their personal money on their election campaigns as they desire.

Individuals and corporate entities, however, are limited to $500 each for each campaign cycle.

What spared Blair from prosecution for violating campaign-finance laws, according to the grand jury report, was a provision in state banking laws — and a promise to pay back Palmire.

In short, once Blair endorsed and possessed the checks made out to himself from his company, Chrissan Investments, he owned those checks and could freely move them to his campaign.

"But for the fortuity of this banking law, these contributions would be in violation of the Florida statute's limitation on campaign contributions, because Chrissan Investments LLC is a legally distinct entity from Mr. Blair that could not have contributed the amounts involved."

"The intermediary vehicle of Chrissan Investments LLC is what creates this problem," the report declares.

As for the loan: "Mr. Blair's loan from Dr. Palmire, even if questionable, is not an illegal campaign contribution, if Mr. Blair is personally liable to repay the money as he asserts," the grand jury report says.

Gainesville State Attorney Bill Cervone said in an interview Wednesday that Palmire was questioned about the allegations, but not by him personally.

Palmire also testified before the grand jury, as did Blair.

Cervone was specially appointed by Gov. Rick Scott to look into the complaint against Blair, which originated with a Marion County CrimeStoppers tip last October, just days before Blair defeated Constitution Party candidate Bernie DeCastro.

Cervone was traveling and said he could not answer some questions because he did not have the information about the case with him.

The prosecutor said no one was given immunity, and noted that his job was to give the grand jury the facts and for the panel to reach its own conclusion.

In its closing, the grand jury said it "expects that Sheriff Blair will, in the future, honor the spirit and intent of the law, as well as the letter of the law, and make clear to the citizens of Marion County who funds his political aspirations."

Contact Austin L. Miller at 867-4118 or austin.miller@ocala.com, or Bill Thompson at 867-4117 or bill.thompson@ocala.com.

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